Share Buy Backs retain and improves the capital position of a company balance sheet it enhances EPS and increases CT1R levels which ultimatley leads to a future higher share price and larger substainable dividends in the future. Where a dividend payout is lost for ever from the company balance sheet. When the BOE talk of buffers they mean the CT1R level of a bank. Lloyds and the rest of the four major banks CT1R are very low compared to other fianancial institutions like the Nationwide Building Society who have a CT1R 19.8 %
Hi Kelly, not all impaired debt is provisioned, i don't know how much of the Irish debt was provisioned, and cannot see the impact on the BS, but the result of the sale is that the % of impaired debt that is provisioned within the bank falls by 2.2% to 48.3% Anyway, results day tomorrow,no doubt we have more PPI -AHO originally said £3bln so how is he still in a job? - i have a growing nervous feeling - hope it's nothing more than an upset tum
You are right that the only real impact on profit is stopping the annual loss of £130m. I was talking about the impact on the balance sheet and was assuming the £2.3bn "considered impaired" would have been provided for. Bit of an error by AHO if they were not?
In my day all charges ie interest and commission were transferred half yearly into anRDD account and therefore did not contribute to profits.....this of course was for doubtful lending where security was light RDD stood for Reaserve for Doubtful Debts,and covered all lending spectrums
I think you are wrong in assuming all the impaired loans are provisioned, they are not. Beebong covers it better than me - below - and i understand the only real impact on profit is to stop the annual loss of 130m from the portfolio. hope this helps
Just wondering why it appears that people on the board seem to prefer a dividend rather than a share buy back, if the share price has more scope to increase a lot higher in the long term then is the dividend option preferred by the 'dippers' ?
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